Guardian group heads for big loss

Losses at Guardian Media Group are set to equal or exceed last year's record £90m deficit, leaving interim chief executive Andrew Miller with a massive task to haul the group back to break-even.

Leaving: Carolyn McCall

As outgoing boss Carolyn McCall leaves to join easyJet, the effects of the media company's controversial deals with private equity firm Apax are likely to have a hugely detrimental impact on results for the second successive year, said sources close to GMG.

The group owns The Guardian and The Observer as well as classified car sales title Auto Trader and business publisher Emap.

Results for the 12 months to the end of March will be published in July or August and another big loss is expected. Just two years ago, GMG made a profit of £306m thanks to a £335m windfall gain from asset sales.

The newspaper publishing arm is expected to report a loss similar to last year's £36.8m deficit, reflecting its policy of not charging for its online content while failing to win sufficient advertising revenue to cover the cost of its huge investment.

The losses follow GMG's deals with private equity firm Apax in 2007 to sell a 49.9% stake in its Trader Media group classified car advertising business for £675m and buy publisher Emap for £1bn.

The firm has written down the value of its 29.5% stake in Emap by about £150m, or half the value of its original investment. Apax has written down the value of its stake in Emap to zero.

GMG and Apax are buying back of about £100m of Emap's £700m debt to put it in a stronger position.